What to do with inheritance

dwsjarcmcd

duncan48 said:

Thrugelmir said:

Review your pension arrangements. 

Yes, that is something I am very keen to do. I have 90,000 in my pension at the moment (I am 48) and one idea is to clear the mortgage and put the remaining amount into my existing pension as a lump sum. Then, I have no way of frittering away the money I inherited! 

At 48 and a fund of £90k, this is going to take some serious work to get it to a place where it will provide you with a liveable income.  You haven't mentioned your circumstances (spouse/kids) which may have a major impact but that aside, if it was me, I would prioritise the pension ahead of the mortgage given the small fund you have, the limited time to boost the fund and of course the tax relief you get on contributions.  Could be a wise move to seek advice

Bobziz

If it we're me I'd.stick it all in NS&I accounts for 6 months, and them assess how my new job was going, do I like it and how secure is it. I'd also assess the COVID situation and the global  investment climate. If all ok at that point, then I'd focus on improving my pension situation.

duncan48

MalMonroe said:

May I just say - when you have your new job and coronavirus is over, spend some on yourself. If you squirrel it all away, well, you can't take it with you. I have friends (we're all retired now) who have portfolios all over the place and savings accounts up the wazoo. But their relatives are going to end up very wealthy. I don't have any of those things but I live comfortably and enjoy myself, plus I've travelled so much already and want to travel again, once it's safe to do so. I don't value material possessions although I used to because I realise now that they'll still be here when I'm not so I've just kept a few sentimental things, jewellery, etc. and treat myself as and when. Because we're not here forever! And what good is a bunch of money if you can't get at it? 

Obviously just my own opinion but as my Mum used to say, there are no pockets in a shroud. Think on. 

PS You're probably wiser just to stick with that mortgage, it'll be over soon and that interest rate is brill. Again, all my own opinion! 

Yeh, I like that philosophy, but it's hard not to have a worried eye on never being able to stop working!
And, personally, I'll feel calmed by not having a mortgage, and knowing that even if the worse ever happened, I'd have the roof over my head. See what you mean though, it is a good rate for the time being.

duncan48

dwsjarcmcd said:

duncan48 said:

Thrugelmir said:

Review your pension arrangements. 

Yes, that is something I am very keen to do. I have 90,000 in my pension at the moment (I am 48) and one idea is to clear the mortgage and put the remaining amount into my existing pension as a lump sum. Then, I have no way of frittering away the money I inherited! 

At 48 and a fund of £90k, this is going to take some serious work to get it to a place where it will provide you with a liveable income.  You haven't mentioned your circumstances (spouse/kids) which may have a major impact but that aside, if it was me, I would prioritise the pension ahead of the mortgage given the small fund you have, the limited time to boost the fund and of course the tax relief you get on contributions.  Could be a wise move to seek advice

Phew, I thought I was doing sort of ok! You've made me think otherwise now
Depends on how early and how extravagantly a person wants to retire I guess. I am married, two kids, first starting at University next month.

duncan48

Bobziz said:

If it we're me I'd.stick it all in NS&I accounts for 6 months, and them assess how my new job was going, do I like it and how secure is it. I'd also assess the COVID situation and the global  investment climate. If all ok at that point, then I'd focus on improving my pension situation.

Sounds sensible, buys me time to reset my life whilst removing the funds quickly from the santander 123 account.

dwsjarcmcd

duncan48 said:

dwsjarcmcd said:

duncan48 said:

Thrugelmir said:

Review your pension arrangements. 

Yes, that is something I am very keen to do. I have 90,000 in my pension at the moment (I am 48) and one idea is to clear the mortgage and put the remaining amount into my existing pension as a lump sum. Then, I have no way of frittering away the money I inherited! 

At 48 and a fund of £90k, this is going to take some serious work to get it to a place where it will provide you with a liveable income.  You haven't mentioned your circumstances (spouse/kids) which may have a major impact but that aside, if it was me, I would prioritise the pension ahead of the mortgage given the small fund you have, the limited time to boost the fund and of course the tax relief you get on contributions.  Could be a wise move to seek advice

Phew, I thought I was doing sort of ok! You've made me think otherwise now
Depends on how early and how extravagantly a person wants to retire I guess. I am married, two kids, first starting at University next month.

It does depend on your age and expectations combined with your other assets and, perhaps your wife’s pension.  Having said that, assume you wanted to retire at 60 and your fund had increased to £200k via normal contributions and growth.  Using a fairly normal drawdown rate of 3.5% (other drawdown rates are available!) would provide a pension of £7k p.a. 

Not my place to say whether this is sufficient for your needs but a good place to start is to have a look at the Pensions board for much more information 

MaxiRobriguez

duncan48 said:

dwsjarcmcd said:

duncan48 said:

Thrugelmir said:

Review your pension arrangements. 

Yes, that is something I am very keen to do. I have 90,000 in my pension at the moment (I am 48) and one idea is to clear the mortgage and put the remaining amount into my existing pension as a lump sum. Then, I have no way of frittering away the money I inherited! 

At 48 and a fund of £90k, this is going to take some serious work to get it to a place where it will provide you with a liveable income.  You haven't mentioned your circumstances (spouse/kids) which may have a major impact but that aside, if it was me, I would prioritise the pension ahead of the mortgage given the small fund you have, the limited time to boost the fund and of course the tax relief you get on contributions.  Could be a wise move to seek advice

Phew, I thought I was doing sort of ok! You've made me think otherwise now
Depends on how early and how extravagantly a person wants to retire I guess. I am married, two kids, first starting at University next month.

For comparison sake I'm 15 years your younger and I'll top £90k next year, but I've chosen to save quite aggressively as I want the combination of paying for 2x kids uni fees and house deposits and early retirement.

duncan48

Hi all, so I am posting with an update on the situation since this thread, if people are interested!
I took the advice to put 50k into Premium Bonds (and on the first month, October, I won 5 x £25.00, so a good start indeed!). 
I overpaid my mortgage by 10%.
I also have landed a job in the Civil Service, which starts in January, so that is hopefully a boost to my pension outlook down the line....., although income for first 21 months whilst working towards the qualification will be a lot lower than I was used to (so keeping redundancy sum in the current account to keep us going if needed).
That just leaves me with where to squirrel away the remaining c. 52,000 that I want to put somewhere safe for 2 years until I can pay off the mortgage without redemption penalties (if that is what I decide to do in the end). Very few options on the savings front now!  
Any suggestions? 
Thanks again, the original advice was great and appreciated. 
Duncan

El_Torro

If you want to access the full £52k in two years time to put into your mortgage then you're right, there aren't many places that are worth putting this money into. I would consider a 1 year or 2 year fixed rate savings account: 

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Bobziz

duncan48 said:

Hi all, so I am posting with an update on the situation since this thread, if people are interested!
I took the advice to put 50k into Premium Bonds (and on the first month, October, I won 5 x £25.00, so a good start indeed!). 
I overpaid my mortgage by 10%.
I also have landed a job in the Civil Service, which starts in January, so that is hopefully a boost to my pension outlook down the line....., although income for first 21 months whilst working towards the qualification will be a lot lower than I was used to (so keeping redundancy sum in the current account to keep us going if needed).
That just leaves me with where to squirrel away the remaining c. 52,000 that I want to put somewhere safe for 2 years until I can pay off the mortgage without redemption penalties (if that is what I decide to do in the end). Very few options on the savings front now!  
Any suggestions? 
Thanks again, the original advice was great and appreciated. 
Duncan

So you now have access to a gold plated pension. If I were in your shoes, I'd forget about paying off the mortgage early and would look to maximise the CS pension options. Look at the benefit of transferring in from your existing pension pot, and/or making AVC contributions.